AT&T Inc. plans to cut about 12,000 jobs, or about 4 percent of the company's total workforce, due to economic pressures, a changing business mix and a more streamlined organizational structure.

In response to these business and economic factors, AT&T plans to reduce its 2009 capital expenditures from 2008 levels. Capital plans for 2009 are being finalized now and specific guidance will be provided when the company releases its fourth quarter results in late January.

"It isn't such a big surprise, because the landline business isn't going anywhere -- it isn't growing," said Neil Strother, Kirkland, WA-based analyst for Forrester Research. "Landline business is flat to declining -- all the growth is in wireless.

"A lot of companies and individuals not buying new landlines, and there is high penetration already," he said. "A lot of companies are in trouble in these economic times, and big companies are as vulnerable as others."

Associated with these job reductions which will occur in December and throughout 2009, AT&T will take a charge of approximately $600 million in the fourth quarter of 2008 to pay severance to affected employees.

While AT&T is reducing jobs in some areas, it continues to add jobs in other parts of the business -- such as wireless, video and broadband -- to meet customer demand.

Handset manufacturer Apple and wireless carrier AT&T both had good third quarters all because of the iPhone 3G (see story).

Many non-management employees affected by these reductions have a guaranteed job offer under union contracts. All employees will receive severance in accordance with management policies or union agreements.

AT&T and ChaCha have announced a strategic relationship in which the mobile search services provider will use a cobranded greeting and promote the carrier when consumers call 1-800 2ChaCha (see story).

AT&T Inc. and Qualcomm's Firethorn Holdings LLC have released a mobile banking application for Apple's iPhone (see story).

AT&T Inc. is a communications holding company.

Among its offerings are IP-based business communications services and wireless, high-speed Internet access and voice services.

In domestic markets, AT&T is known for the directory publishing and advertising sales of its Yellow Pages and Yellowpages.com organizations.

The AT&T brand is licensed in such fields as communications equipment.

As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings.

AT&T is the number-one wireless carrier in the U.S.

"Verizon is trying to move people from copper to fiber -- they're not giving up on landline, they're trying to move people to a faster pipe," Mr. Strother said. "Many companies are pursuing a three-screen strategy -- Internet, mobile and TV.

These job cuts represent a large company trying to stay competitive in a very competitive environment.

"Wireless has growth left in it, and people are calling more via mobile and using email, social networking, IM and SMS to communicate, so traditional landline service is not as important or crucial," Mr. Strother said. "Landlines are not dead, but they won't grow.

"It's not surprising that AT&T is laying people off in a down economy," he said. "They're thinking, 'Let's trim the fat and move forward.'"